Malaysia’s Economic Woes Turn Up Anti-Semitic Coin

Even to those Americans aware of it, the financial crisis now unfolding in Southeast Asia is merely a distant event--a few headlines, mostly in the financial pages, about exchange rates, not people.

That’s a mistake. If you want to see just how ugly and nasty these events could become, look at the remarks by Malaysian Prime Minister Mahathir Mohamad over the last few days.

Mahathir heads a country whose currency has plummeted by more than 20% the last couple of months. In that respect, Malaysia is not alone: Thailand led the way in this financial crisis, and the Philippines and Indonesia have similar problems.

The problems represent the classic winding-down of an economic boom: Loans were made, buildings were constructed and businesses were opened based more on hope than on underlying economic realities.

Mahathir has led the way in searching for scapegoats. During the last few weeks, he sought to blame his country’s problems upon currency speculation by American financier George Soros.

Soros has repeatedly denied that he took any part in the currency turmoil that drove down the value of the ringgit, Malaysia’s currency, and Mahathir hasn’t come forward with evidence of Soros’ involvement. But that didn’t stop Mahathir.

Last Friday, Mahathir took his scapegoating several giant steps further: He began vaguely suggesting that “the Jews” were responsible for the difficulties of his mostly Muslim country.

“We may suspect that they, the Jews, have an agenda, but we do not want to accuse,” said Mahathir, in remarks that were reported by the Associated Press and the Malaysian government news service, Bernama.

“And incidentally, we are Muslims, and the Jews are not happy to see the Muslims progress. The Jews robbed the Palestinians of everything, but in Malaysia they could not do so, hence they do this, depress the ringgit.”

Over the weekend, the Malaysian prime minister sought to soften the impact of his remarks by insisting they had been misinterpreted. “I merely stated that, incidentally, this person [Soros] is a Jew, and, incidentally, we are Muslims,” he said.

This was, to say the least, not a very reassuring explanation. He didn’t bother to say why religion mattered or why he had brought up the subject in the first place.

What’s going on here? On its face, this was anti-Semitism, pure and simple. There have been occasional signs of it in Malaysia before. A decade ago, the New York Philharmonic had to cancel a performance in Malaysia after it was asked to drop from its program a piece by the Jewish composer Ernest Bloch.

Mahathir’s outburst seemed in the ignominious tradition of bigotry elsewhere in the world. Yet there are also aspects of his remarks that reflect his own background and the recent history of his country.

Malaysia has almost no Jews. It does have a Chinese minority that makes up 31% of the nation’s population of 21 million. In the past, there have been tensions between Malays and Chinese; in 1969, riots erupted between the two groups in which hundreds of people were killed.

Mahathir has been prime minister of Malaysia since 1981. He rose to power as a Malay nationalist. In a 1970 book, “The Malay Dilemma,” he attempted to explain why Chinese were so powerful and Malays so weak in his country’s economy by describing the supposed racial characteristics of the two groups.

In recent years, Mahathir has presided over Malaysia’s surprising growth and prosperity. Visitors to the capital of Kuala Lumpur regularly marvel at its growth, which includes the world’s tallest skyscrapers, and seemingly unending construction.

But the currency crisis of the last couple of months has forced the delay of some of these projects. Now, some of the companies that took part in the boom are struggling to repay dollar-based loans that suddenly have become much more expensive. Some of the country’s business elite seem to be calling into question the prime minister’s leadership.

Against this backdrop, Mahathir’s efforts to find a scapegoat are a classic effort to blame others for Malaysia’s problems. They might also be viewed as something else: a reminder to the nation, including its Chinese minority, of the racial tensions that lay in Malaysia’s not-too-distant past. Don’t make trouble for me, Mahathir seems to be saying, or I could stir things up again.

Of course, Malaysia is only one country. But other Southeast Asian nations have experienced similar social tensions during the last few decades. Indonesia, for example, also has substantial Chinese minorities.

It is hard to know yet where the region’s financial crisis will lead. It may be over, but there are also fears it could spread elsewhere. Some U.S. scholars and economists, for example, have begun to wonder what will happen to markets in China when there are not nearly enough tenants to fill the high-rise office buildings being constructed in Shanghai.

In one sense, Mahathir’s remarks last week represented merely the ranting of a single, race-obsessed leader. In another sense, however, they were a disturbing warning that if Asia’s economic boom were to end, so might the social peace and tranquillity that came along with it.

Jim Mann’s column appears in this space every Wednesday.